Houthis, Yemen reach financial agreement

Yemen’s government and the Iran-backed Houthi rebels have agreed to halt titfor-tat banking sanctions as they wrestle for control of the country’s financial institutions, the United Nations said yesterday.

The Houthis have been fighting a Saudi-led coalition since March 2015, months after they seized the capital Sanaa and most of Yemen’s population centers, forcing the internationally recognized government south to Aden.

The rebels and the government had in December committed to a U.N.led roadmap to end the war, agreeing to work towards “the resumption of an inclusive political process.”

But Houthi attacks on Red Sea shipping since November and subsequent U.S. and British retaliation have put peace talks on hold.

On July 22, the two sides informed Hans Grundberg, the U.N. envoy to Yemen, that they “agreed on several measures to de-escalate,” said a statement from Grundberg’s office, which thanked Saudi Arabia for its “significant role” in brokering the deal.

It came as the warring parties were locked in a fight for control over the country’s banks, with both facing a severe financial crunch.

Their latest agreement involves “canceling all the recent decisions and procedures against banks by both sides and refraining in the future from any similar decisions or procedures,” the envoy’s office said.

In May, the governmentcontrolled central bank banned transactions with six banks in Houthi-held Sanaa for failing to abide by an order to relocate to Aden.

As a result, currency exchange offices, money transfer agencies and banks in government-held areas could no longer work with those financial institutions.

The rebels said that the move was a disguised attempt by the U.S. and Saudi Arabia to exert financial pressure on the Houthi banking system.

The Houthi rebels have been fighting a coalition in Yemen for ten years.